Mortgage Industry Experience Requirements

One of the reasons that the states require that mortgage brokers and lenders be licensed is to ensure that a person who has no experience cannot just open a mortgage business and start originating loans.

Many states require that before you can be licensed, either as a company or as an individual loan officer, you have a certain amount of loan origination experience. For example, New York requires 2 years of full-time mortgage industry experience for mortgage brokers and 5 years of underwriting experience for mortgage lenders. And the experience must be in loan origination. Arizona requires 3 years of industry experience, but loan processing only counts as half the equivalent time of loan origination. For example, if the president of the mortgage broker company has 2 years of loan processing experience and 1 year of loan origination experience, that will not be sufficent to satisfy the 3 year requirement. The loan processing experience will count as 1 year, not 2, plus the 1 year of loan origination experience equals 2 years of mortgage industry experience.

The states that have mortgage industry experience requirements have different ways for how you prove that you have the needed experience. Georgia and Arizona, for example, require letters from previous employers. This can be problematic when the company you worked for is no longer in business. In those cases, you need to track down your supervisors and have them write letters about your experience with the defunct company. Other states, such as Florida, will allow a letter from an industry professional who has knowledge of your work experience to confirm that they have known you as a mortgage broker or underwriter for the requisite period of time. Still other states contact your past supervisors and request that they complete a verification form and send it to the banking department.

As tempting as it may be to fudge this requirement, remember that if you do not have the experience to originate loans and do not know what the laws and regulations are in the state in which you want to be licensed, you will make mistakes that will cost you a great deal of money.